Real REMAX Group (REAX) Q3 2026 earnings review
Real REMAX cuts costs fast, but 2027 sales barely move
Real REMAX, the brokerage and franchise group formed in August, spent its first quarter cutting costs. Counting both businesses in both years, sales rose 20%, but profit before one-offs gained only 8%. Chief executive Tamir Poleg said the group is preparing for another very challenging year. By our math, its first joint outlook leaves 2027 sales near this year's level.
| Sales, both companies counted in both years | $770 million +20% from a year ago |
|---|---|
| Profit before one-offs, as reported | $33.8 million $20.4 million a year ago, before REMAX joined |
| Loss per share | -$2.25 -$0.02 a year ago |
| 2027 outlook | New sales $2.6bn-$2.8bn, profit before one-offs $175m-$190m |
⚖️ Verdict: 🔴 Bearish
The case got worse: the first combined outlook shows almost no sales growth, with the profit improvement resting on cost cuts. REMAX's fee-paying American network shrank again, and Real's agent count slipped after the quarter closed. The good news: president Jenna Rozenblat has acted on more than $40 million of yearly savings, beating the pre-deal target.
The question now is whether cost cuts can lift profit while the housing market shrinks. One answer: the group has banked the savings and its international network keeps growing. The other: fee-paying agents leave North America before the savings arrive. Next quarter's agent counts will decide it.
🐂 Bull Case
Real Keeps Signing Agents While Rivals Shrink
Real runs its own brokerage: agents join the platform and hand over a share of every commission, so each recruit adds revenue directly. The business kept recruiting through a weak market and ended September with 36,610 agents, a fifth more than a year earlier.
Those agents closed 62,738 sales, 17% more than a year earlier. Finance chief Ravi Jani set that against American existing-home sales, which he said fell 2% over the same three months.
- Agents on the platform: 36,610, up 21%
- Sales closed: 62,738, up 17%
- Brokerage revenue: $695 million, up 23%
- Sales per average agent: 1.74, against 1.84 a year ago
These gains matter because they do not need a housing recovery: Real is taking work from other brokerages rather than relying on a better market. But every agent now closes fewer deals than a year ago, so revenue grows more slowly than the headcount behind it.
What to watch: the agent count at the next results, after the group removed more than 500 people in October for unpaid dues or lapsed licences. A second quarter of falling sales per agent would show recruiting alone cannot hold revenue up.
Cost Cuts Beat the Pre-Deal Target
RE/MAX brought the group two of everything: two head offices, two sets of software contracts, two cost bases. President Jenna Rozenblat is removing the duplicates, and reports more than $40 million of yearly savings already actioned, of which $28 million reaches profit before one-offs.
"These savings reflect actions we have already taken not simply opportunities we have identified," Rozenblat said. Her team cut combined headcount by more than 14% and closed 104 Motto Mortgage franchise offices, part of a loss-making mortgage arm.
The savings have not reached the accounts yet. General and administrative costs ate 8.3% of sales this quarter, against 3.4% a year ago, because the acquired overheads arrived first.
What to watch: overheads as a share of sales next quarter, the first without merger bills. A reading near Real's old level would show these savings are real money.
Agents Start Paying for Leo Pro
Leo Pro, launched on October 20, gives agents "more than three hundred specialized AI agents" that handle marketing, lead generation and transaction paperwork. The software "enables real estate professionals to execute tasks through natural language commands", and the group charges a subscription plus usage.
Poleg said about 5,600 agents were using the service within weeks and roughly 3,500 were paying for it. He intends to offer it to the whole REMAX network, many times larger than Real's own agent base.
It is the first product the group can sell rather than give away, so it earns money whether or not houses change hands. Nobody outside knows the price, though: the group publishes no revenue line and no per-agent fee.
What to watch: a paying-subscriber count or a technology revenue line at the next results. Numbers well above a few thousand payers would show agents will pay for software while commissions fall.
🐻 Bear Case
REMAX's American Network Keeps Shrinking
RE/MAX does not employ agents. It licenses its brand to franchise owners, who pay fees for every agent on their books, so the revenue follows the agent count. In the United States that count has fallen for six quarters running.
At the end of September the network held 46,611 American agents, 5% fewer than a year earlier. Growth elsewhere let the group announce that its global network edged up, to 148,088 agents.
- United States agents: 46,611, down 5%
- Canada agents: 25,507, up 2%
- Outside North America: 75,970, up 4%
- Global network: up 0.4%
That global figure flatters the business, because American and Canadian agents pay far more than the rest: North America holds under half the network but delivered 92% of franchise revenue. Rozenblat was blunt: "We do not expect an immediate reversal in agent attrition in the franchise business".
What to watch: the North American agent count in February, which Jani expects to fall again by a low to mid single-digit percentage. Another drop of that size removes roughly 3,000 more fee-paying agents.
Debt Arrives at the Bottom of the Cycle
Real carried no debt before this deal. To pay for RE/MAX it drew a new $550 million term loan, and after a voluntary repayment the balance stood at $525 million at the end of September.
- Term loan outstanding: $525 million
- Cash and short-term investments: $109 million
- Interest expected in 2027: about $50 million
- Debt repayment planned for 2027: about $75 million
Cash flow makes the task harder. By our math the group paid out $56 million more than it took in during the quarter, because merger fees and severance fell due at once. Two class actions over sales commissions also await court approval, with no figure attached.
Jani wants debt down, and the release repeats the aim "to reduce its net leverage ratio to below 2.0x" by 2028. Net debt of about $404 million by our math is more than twice the middle of next year's profit range.
What to watch: operating cash flow in the next results, the first quarter without merger bills. Cash generation short of the $75 million repayment plan would leave the leverage target resting on cost cuts alone.
Each Dollar of Sales Earns Less
Put both companies into both years and the result looks weaker. Sales rose 20%, yet profit before one-offs gained only 8%. The margin on that measure slipped by 0.7 of a percentage point.
Inside the brokerage, more deals came from agents who had already paid their annual commission cap, which leaves Real a thinner cut; its segment margin fell to 3.8%. Commissions and other direct costs took 88.8% of group revenue, lighter than last year only because franchise fees carry no commission.
The side businesses meant to fix this stayed small. Title, mortgage and the Real Wallet account brought in $3.8 million. By our math that is 18% more than a year ago once the acquired mortgage units come out. Poleg said attach rates had not moved: under 1% on mortgage, about 3% on title, though he expects REMAX owners to change that.
What to watch: the margin on profit before one-offs next quarter, which the outlook puts near 5.8% by our math. A reading at last year's level would show cost savings beating the commission squeeze.
The Outlook Has Sales Growth Stopping
Real REMAX plans for a housing market that gets worse before it gets better. Jani assumes American existing-home sales fall another 5% to 10% next year, which would take volumes to their lowest in more than 30 years.
The outlook follows those assumptions down. By our math the fourth-quarter revenue range sits about 4% above the same period last year on a combined basis, against the 20% just reported.
- Fourth-quarter sales: $575m-$625m, about 4% above a year ago by our math
- Fourth-quarter profit before one-offs: $32m-$38m, about 5% below a year ago
- 2027 sales: $2.6bn-$2.8bn, roughly level with 2026
Agent numbers have already turned. Poleg said departures picked up from September and the group has let go more than a thousand people who left the industry or failed to renew licences. Jani expects sales per Real agent to fall again next quarter, by a high single-digit to low double-digit percentage.
What to watch: sales per average agent in February, after the drop to 1.74 from 1.84 this quarter. A second decline of that size means recruiting must speed up just to keep revenue level.
👓 Other Themes
The Merger Took Away Some Numbers
Readers lose detail this quarter. Real no longer publishes the brokerage gross margin, the agent churn rate or the title attach rate that filled its earlier reports. Jani did deliver the combined baseline he promised in August, including tables that put both companies into both years.
Group Joins a Listing Data Initiative
On October 26 the group became a founding member of Open Real Estate, a broker-led effort to change how listing data travels and to "expand access to housing inventory", alongside Keller Williams and HomeServices of America. Poleg wants a say in that system, but declines to discuss products, economics or revenue.
💲 Other KPIs
Up 36% from a year ago, because RE/MAX holders took shares in the merged company. The count had been growing by under 11% a year before the deal. All periods now appear on a new basis: the year-ago quarter shows 21.9 million shares, a tenth of the figure published then.
Goodwill, franchise agreements and other intangibles make up 74% of everything the group owns, against almost nothing nine months ago. These items are the accounting price put on the RE/MAX brand and its franchise contracts, and they can only be written down, never up.
Close to three times the $20.2 million carried at the end of December. Franchise owners now owe monthly fees, a kind of bill the brokerage model never produced. Whether those owners pay on time is the first place franchise distress would show.
🔮 Guidance
New, and the first numeric range the business has ever published. By our math the middle sits about 4% above the same quarter last year with both companies counted in both years, after 20% this quarter. Jani expects each Real agent to close fewer deals and the REMAX network in North America to shrink again.
New. By our math the middle of the range lands about 5% under the same quarter last year on a combined basis, a margin near 5.8% and the weakest in five quarters. The first savings arrive too late in the year to cover thinner commission income.
New. By our math the middle leaves next year's sales about 1% above where 2026 finishes on a combined basis. The plan assumes American existing-home sales fall 5% to 10% next year. Jani explained the caution plainly: "we want to be prudent in our outlook and not plan for a recovery".
New. The middle implies growth near 11% on a combined basis, almost all of it from cost cuts rather than sales. Jani said a flat market would lift the figure towards $200 million. Subtract the share-based pay, depreciation and interest the group itself lists for 2027 and, by our math, nothing remains.
Raised. The pre-deal promise was about $30 million spread over three years; two months in, Rozenblat expects more than that in 2027 alone. Jani said the savings run at roughly $7 million a quarter from January and build through the year as supplier contracts expire.
Unchanged. Net debt of about $404 million by our math equals roughly 2.2 times the middle of next year's profit range, so the target needs both profit growth and repayment. The plan sets aside about $75 million for debt next year, which Jani says depends on cash generation.
❓ Key Questions
How many agents does Real have today?
The release counts about 36,200 on November 3. The chief executive told the same morning's call about 30.2 thousand. The gap is bigger than a year of recruiting, and only one figure can be right.
What is the brokerage gross margin now?
Real published it every quarter before the merger, and agents who pass their commission cap were pushing it down. The merged accounts fold it into one cost of sales line, so the squeeze is no longer visible.
What does Leo Pro cost an agent?
The group counts users and payers but gives no price, no revenue and no renewal rate. Without one of those, nobody can size the technology revenue it promises.
How many franchise owners renewed this quarter?
REMAX earns from agreements with franchise owners, not only from agent counts. Renewal and termination numbers would show whether owners are staying while their new parent cuts costs and changes systems.